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Security Fraud: Playing the World Market

"Everyone was investing—everyone. The man was supposed to be religious and he did a lot of charity work. Like everyone else in [our town], just walk through the streets and most people will tell you they had invested with him. We're lucky; some people mortgaged their homes [to raise money to invest]. So, we will manage." 1

The words of a victim of convicted Wall Street fraudster Bernard Madoff? No, but close. They're the words of Mohammad Shour, just one of thousands of victims of Salah Ezzedine who is now being called the "Lebanese Bernie Madoff." Shour invested his family's life savings of $45,000 with the highly respected Ezzedine, anticipating promised returns of up to 50 percent. Shour, a business management college graduate, knew the promised returns were inconceivable: "I would always tell my family we are going to wake up one day and face a disaster," he says. "And that day has arrived." Now, the dream of the fruit orchard he was going to buy with his invested principle and returns has vanished.

Salah Ezzedine was a hero among the marginalized Muslim Shi'ite people of southern Lebanon. He made it out of his own small village of Maaroub and found success in business, later building a stadium and mosque in his hometown. He published children's books and ran a tour company, taking Muslim pilgrims to Mecca. He was generous and charming and offered Lebanese villagers the opportunity to profit by investing in his businesses—supposedly oil, publishing, commodities, and television. And trusting villagers pooled their money and handed it over, grateful for a once-in-a-family's-history opportunity.

But the estimated $1.5 billion Ezzedine collected from investors is now gone. Having squandered his investors' money (including prominent Lebanese leaders connected to the Hezbollah political party), he went bankrupt in 2009 and went into hiding until Hezbollah forces captured him and turned him over to authorities. He left a trail of dashed hopes in his wake: "I inherited $100,000 from my father to continue my studies," says a young man from Ezzedine's village. "I invested them with Ezzedine, and now all my dreams are destroyed. I don't know what I was thinking when I invested with him." 2

The story of the larceny in Lebanon could be told in any language—bilking of innocent people is no respecter of borders. Most of these frauds are versions of what is now referred to as a Ponzi scheme, named for Charles Ponzi who concocted a way to steal money from investors in and around Boston in 1920. His investment vehicle was postal reply coupons—sort of a currency exchange deal between countries. About 40,000 people invested $15 million before he was caught, jailed, and ultimately deported back to Italy.

I was amazed to survey a chronological list of Ponzi-type schemes from 1899 to the present day.3 More than fifty different frauds were described from countries around the world, using every conceivable scheme imaginable to separate people from their money. And there will be more. For that reason, every person who has a dollar more than he needs must be careful about where he decides to store or invest it.

"But I would never fall for a scheme like that," you say. Really? When CBS news anchor Katie Couric interviewed a group of Bernie Madoff's "investors," among them were a certified public accountant and a successful investment advisor.4 If financial experts can be deceived by white-collar thieves, where does that leave the rest of us? Remember: Deceived people don't know they're deceived! The Bible would not warn us about deception if it could not happen to us (Deuteronomy 11:16; Luke 21:8; 1 Corinthians 6:9; 15:33; Galatians 6:7; James 1:16).

Bilking knows no borders for one reason: the pervasiveness of sin. The biblical doctrine of the total depravity of man does not mean that man is totally as bad as he could be. Rather, it means that every part of his being is depraved (Romans 3:10-18). The part of a human being's moral fiber that we might expect to stop him when he is about to steal a widow's life savings . . . is depraved. There is nothing inherent in the natural man that would keep him from doing bad in any realm except the conditioning of the conscience through parental or societal influence. But such conditioning can be easily overcome when the possibility of wealth is in play.

America, Australia, Philippines, Germany, Brazil—it doesn't matter. Wherever human beings live, the possibility of fraud and deception is alive and well because of the depravity of man.

Living Without Losses

So what should the average person do to feel secure in a world where fraud is possible in the most respected tiers of society? In the last few years, hundreds of banks have failed, pension funds have lost billions of dollars, companies have gone out of business—and the bad news keeps on coming.

All I can advise anyone to do in times like these (with finances or any other issue) is to be prayerful (Proverbs 3:5-6), careful (do extra due diligence), and conservative (conserve what you have). And above all, "Be anxious for nothing, but in everything by prayer and supplication, with thanksgiving, let your requests be made known to God; and the peace of God, which surpasses all understanding, will guard your hearts and minds through Christ Jesus" (Philippians 4:6-7).

Whenever I meet a person—even a brother or sister in Christ—who is anxious about the future, his family, his finances, or any other peace-stealing situation in life, I know I'm talking with a person who is living with loss. Not primarily the loss of money or a job or a house, but the loss of peace and security and hope. Because there is no situation in life (and Paul lists quite a few dramatic ones in Romans 8:38-39) that can separate us from the love of Christ, we have no reason to live without complete peace and security.

You may lose, through no fault of your own, everything this world has to offer in terms of security. But there are four things no one and no circumstance, locally or globally, can take away from you:

1. Your salvation in Christ.John 3:16 says that if you have truly believed in the Lord Jesus Christ then you shall not perish but have everlasting life. No one, Jesus says in John 10:28-29, can snatch out of His hand the ones the Father has given to Him—ones like you, if you have believed in Him. You can lose all your money, all your property, all your possessions, but you will never lose your salvation in Jesus Christ.

2. Your shield of God's promises. The apostle Paul says every believer's faith is a shield to protect them from the evil one (Ephesians 6:16). Satan speaks lies (John 8:44), but your shield is faith in the truth of God's Word (Psalm 119:160; John 17:17). No angel or human being can take God's truth away from you.

3. Your security as a child of God. One of the ministries of the Holy Spirit in you is to testify to you that you are God's child. Not only are you God's child, your inheritance is already reserved for you in heaven—an inheritance you can never lose (Romans 8:16-17).

4. Your soundness of heart and mind. One of the gifts God has given you is a sound mind with which you are able to counteract the spirit of fear so prevalent in this world (2 Timothy 1:7). Would God allow anyone to steal from you something He has given you

Meditating on these (and other—Philippians 4:8-9) truths is your best defense against the spiritual and commercial fraud that is let loose in our world. Our job, Peter says, is to "be serious and watchful in [our] prayers," because "the end of all things is at hand" (1 Peter 4:7). We are to be "watchful in all things," Paul wrote Timothy (2 Timothy 4:5).

But there is a difference in watching with confidence and watching with fear and insecurity. "Watch, stand fast in the faith, be brave, be strong," Paul wrote (1 Corinthians 16:13), "looking for the blessed hope and glorious appearing of our great God and Savior Jesus Christ" (Titus 2:13). Watching for anything else in this world is sure to disappoint.